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1 8guidelines for business intelligence success Best in class users of business intelligence significantly outperformed others on key metrics. by Greg Deitch, Partner/President Trabon Strategic Technology Group If you are looking to drive revenue, increase profits and streamline the overall efficiency of your business, a new generation of business intelligence technology designed for mid-sized companies can be an invaluable asset. This white paper outlines eight important guidelines for successfully implementing and getting the most out of your business intelligence system.

2 The Business Intelligence Reality Business intelligence (BI) has long been used by large organizations to drive top-line revenues, streamline processes and increase profits. A new generation of BI technology is now allowing mid-sized companies to reap similar benefits. These benefits were recently demonstrated in an Aberdeen Group study that showed that mid-sized companies who were best in class users of business intelligence significantly outperformed others on key business metrics. 79% 80% 95% 92% 96% 91% While the need for business intelligence has never been clearer, the path to successfully implementing a business intelligence system remains hazy for most business leaders. Too often these business leaders simply ask IT to purchase a tool and expect that they ll soon be slicing and dicing data and making decisions with a new level of clarity. It s rarely that simple. This paper seeks to remove some of the confusion by examining eight guidelines essential to BI success.

3 1) Link Measures to Strategy When defining your business intelligence strategy, always start with your company strategy: What are the objectives the company is working to achieve? What measures will let management know they are achieving their objectives or that they are off-track? In a well-designed BI system, the measures selected all work together to reinforce the strategy and focus attention on the most critical areas of the business. Too often, however, organizations simply measure what is easy and available without considering whether those measures drive business success. A well-designed BI system should also drive action. When an executive or manager sees something of concern on a dashboard, they should know immediately what to drill into. The BI system should facilitate these deeper dive drilldowns by making drill-down easy. Measure Transform Identify Analyze Companies that compete on outstanding customer service will want to focus a great deal of attention on customer metrics, for example, customer satisfaction, number of problems handled on the first call, etc. Companies competing more on being a cost leader will want more of their focus on cost metrics, for example, set up times, spoilage, and logistics. Having a well thought-out measurement framework that is linked to core organizational objectives and that facilitates informed action is a hallmark of a successful BI system. It should be a prerequisite to every other aspect of implementing business intelligence. 2) Identify Leading Measures Financial results are a cornerstone of any business intelligence system. However, they suffer from the problem that they are lagging indicators: they tell you what happened in the past. At that point there is nothing that anyone can do about the result. Leading indicators are measures predictive of future results. For example, mature sales organizations can frequently identify activity measures such as proposal volume or follow-up call percentage that are highly predictive of revenues one or two quarters in the future. By identifying, measuring and, most importantly reacting to a set of predictive indicators, management can equip themselves with a whole new set of tools for driving future results. While your BI platform should have an appropriate mix of both lagging and leading measures, tracking leading indicators is what truly delivers the return on investment.

4 3) Understand Your Data Every BI project should begin by first identifying the desired measurement framework. This exercise should be done without regard to what data is actually available. The question should be, if we really want to run this company by the numbers, what information would we need? Once you ve determined how you want to operate, then it s time to understand your data. What information is available? Is it clean? Is it complete? Are there critical types of information that aren t currently available at all? The answers to these types of questions reveal the gap between where you are and where you d like to be. Projects can then be identified and prioritized to close that gap. Some may be as simple as a change in process or a data cleansing. Others may require an entirely new application be implemented. In every case, the organization should be able to analyze the investment needed to achieve each measure and then weight that against the potential benefits. 4) Appoint a BI Champion As with any significant change in process, user adoption is key to achieving the expected return on investment. Moving from instinctual, to data-driven decision making is no different. It s important to designate a BI Champion who will serve on a daily basis to evangelize the value of the concept, identify and mitigate risks to the program and act as the go-to-person for all things BI. The BI Champion should not be confused with the Executive Sponsor who is instrumental in initially selling the value of the program and then serving as the final authority for dispute resolution, direction and budgeting. Rather the champion is either a director or manager level committed to helping users understand how to leverage the system to achieve their goals and provide basic user support. The champion reduces resistance to the program. Without a champion, you risk the usual frustrations associated with a new way of thinking and process, leading to low user adoption and ultimate failure. 5) Don t Get Too Wowed by Tool Demos Business intelligence software vendors are brilliant at showing just how cool their tool is and making it look incredibly easy to create a new report. Don t fall under the spell. The BI universe is inhabited by a wide range of technology ranging from Fortune 500-class to simple Excel add-ons. While there are many great tools, they are not right for every organization. It s important to cut through the flash and hype to understand the features you really need, the ability of your organization to support a tool and the company s appetite for change. By taking the time to define your measurement framework up front and by understanding your data, you ll be in a position to select the tool that offers the right balance of function and cost. Beware also of promises about how easy it is to create queries without IT involvement. While most BI tools do offer the ability for business users to create their own queries, it s overly optimistic to believe that IT won t need to play a significant role in making that happen. Most business users are in the dark when it comes to the type, quality, location and structure of the company s data, factors essential to producing trusted, actionable insight. Finally, be careful not to overspend on a BI tool and be left hamstrung with a budget inadequate to successfully run the program.

5 6) Don t Try to Measure Everything As leadership teams start to understand the capabilities of business intelligence, there s a tendency to want to measure everything. This is a common mistake to be avoided. Just because something can be measured doesn t mean it should be measured. To be effective, there should be a purpose behind each measure. Why is this measure important to the company? What actions will this measure drive? 7) Start Small It s easy to become captivated with the capabilities and promise that BI has to offer. Organizations frequently bite off more than they can chew initially. True believers have likely been waiting awhile for the company to develop a BI program and thus will be chomping at the bit to execute it in an aggressive way. Early converts won t be able to get enough especially after they witness the insights developed for other departments. There are always surprises, setbacks and a lot of learning that takes place as a BI system comes online. For this reason it s best to think in terms of small, well defined goals and insight first. It helps to begin by selecting high value targets for improved performance that can be quickly and positively impacted by better insight. The goal initially should be to prove the value of the program and investment by achieving quick, irrefutable wins. 8) Create a Change Management Plan Transforming a company culture from one that bases its decisions on instinct to one that embraces data driven decision making is challenging. It s common for people to feel uneasy with the additional scrutiny that comes with a new BI capability. Setting the proper tone and addressing the organizational and cultural issues is essential. If the rank and file believes that the new BI insight will be used as a weapon rather than an operational improvement tool, they will almost certainly game the system and resist the change at every turn. Most companies that create and sustain successful BI programs adopt the following best practices. Identify the people affected. Determine the benefits to them. What s their reward for success? Communicate, communicate, communicate. Define training strategies, not just on the tools but on the decision-making. Conclusion Now more than ever it is essential for companies of all sizes to use business intelligence to help them compete effectively. By understanding that a successful BI project is as much about people, processes and strategy as it is about technology, you have taken an important first step in achieving BI success. For more information on this or other topics please visit About Trabon Trabon Strategic Technology Group delivers innovative information technology that helps clients win more business and reduce operating costs. Our team draws from decades of IT and business experience to deliver maximum benefit from technologies that improve collaboration, business intelligence, product development, client portals, CRM and e-commerce.

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